Each lender sets its own loan minimum and maximum borrowing amounts. Just because you can borrow up to your remaining cost of attendance, however, doesn’t mean that you should.
Your loan balance, interest rate and loan term (definitions below) can dramatically impact the overall costs of a private student loan.
When you take out a student loan, your balance is the amount you borrowed. As interest adds up, your loan balance can grow. You might have several student loan balances, depending on how many loans you took out.
When you borrow a student loan, you agree to pay back the amount you borrowed, plus any interest that accrues. With the exception of federal subsidized loans, interest starts racking up from day one. Private student loans can come with fixed or variable interest rates. You can usually choose which rate type you prefer. Variable rates often start lower than fixed ones, but they run the risk of increasing over time.
The term is the number of years it will take you to repay your loan. Private loans are not eligible for federal repayment plans. Most lenders will let you choose a term of five to 20 years when you borrow.
To determine how much in private student loans you should borrow, start by considering a couple of general rules of thumb: Borrow as little as possible, and borrow only what you can realistically afford to repay once you leave school and enter the workforce.
Then estimate your proper borrowing amount by doing a little homework: